Kakao M

Kakao M (Hangul: 카카오M; formerly Seoul Records, YBM Seoul Records and LOEN Entertainment) is a South Korean entertainment company established by Min Yeong-bin in 1978. It is currently one of the largest co-publisher companies in South Korea. The company operates as a record label, talent agency, music production company, event management, concert production company and music publishing house.

As of 2015[update], the company was the leading record company in South Korea by net revenue according to the statistics compiled by the Korea Music Content Industry Association (KMCIA) through the Gaon Music Chart (30.4%); it is also the second leading company in terms of album sales (25.4%).[7] LOEN Entertainment became a subsidiary of Kakao in January 2016 and was subsequently renamed two years later.[3]

Online music sales account for most of the company's profit, with 93.9% of revenue coming from online music sales. The label also distributes CDs of some other entertainment agencies in South Korea through its branch LOEN Music, but makes less than 5% of its revenue through them.[8]

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Kakao M was founded as Seoul Records in 1978 by Min Yeong-bin as a subsidiary of YBM Sisa, a company mainly involved in creating language-learning tapes.[9] The company was officially registered in 1982, and in 1984 it began to produce and distribute records of classical and traditional music. It was registered as a venture capital company in 1999 when it began to sell albums while operating an online shop. In 2000, the company's name was changed to YBM Seoul Records and it began to operate on KOSDAQ. The company joined the IFPI in 2003. Korean conglomerate SK Telecom bought a 60% share of the company in 2005, and YBM Seoul Records subsequently became part of SK Group.[10]

In August 2012, the recording artists under Kakao M collaborated to release a collaborative EP titled LOEN Tree Summer Story under the collective title 'LOEN Tree'.[14]

On July 18, 2013, Affinity Equity Partners, through its subsidiary Star Invest Holdings Ltd., bought 52.56% of Kakao M's shares, leaving SK Group with only 15%.[5] Five months later, Star Invest Holdings acquired RealNetworks, Inc.'s 8.83% stake in the company.[15] The company was reorganized to include two labels: "LOEN Tree" (Jo Yeong-cheol) and "Collabodadi" (Shinsadong Tiger).[16]

On December 18, 2013, Kakao M acquired 70% of shares in Starship Entertainment, making it as an independent subsidiary of the company.[17]

On May 11, 2017, Kakao M announced its strategic drama production alliance with CJ E&M's drama production subsidiary Studio Dragon Corporation. Among the plans under the alliance is producing dramas based on web novels and webtoons on KakaoPage and Daum Webtoons (which copyrights are managed by Podotree, the web literature subsidiary of Kakao).[18] (Kakao M first entered the drama production industry three years ago through the cable-web drama Another Parting, which starred Seo In-guk and Wang Ji-won.) On August 25, Kakao M announced that its joint venture with Studio Dragon will be called as Mega Monster.[19]

The company has also signed actress Kim So-hyun through setting up her own independent label, E&T Story Entertainment, which is led by her long-time manager Park Chan-woo.[20]

Upon approval by the company's board of directors in a December 20 meeting, the company is known as Kakao M Corporation (Hangul: 주식회사 카카오엠) since March 23, 2018.[21] The letter M in the new corporate name stands for three things: Melon (the company's flagship online music service), Music (the company's core business) and Media (another business that the company will advance to in the future). The company will now also have a corporate catchphrase, We Entertain.[22][23]

Barely a month before the company's relaunch under its new name, Sean Seong-hoon Park resigned from both his positions as CEO of the company and chief strategy officer of its parent company, and later moved to Netmarble Games. He was replaced by Melon division head Lee Jae-wook.[1]

2016
On October 9, 2016, the Supreme Court of South Korea handed out a 100 million won fine each to Kakao M and its closest competitor Genie Music (then known as KT Music) for colluding in price fixing, dating back to a case filed in 2008. Co-CEO Shin Won-soo, who was the sole CEO at the time being, was also sentenced to pay 10 million won.[28]

In 2013, Kakao M made a deal with C-JeS Entertainment to promote and distribute Junsu's second studio albumIncredible. Days before the album's release, C-Jes was reportedly notified by Kakao M that they would distribute the album but had scrapped plans for promotional marketing and broadcasting Junsu's upcoming showcase on MelOn, although they would be able to broadcast it on LOEN TV. Promotional banners regarding the album's release on MelOn also disappeared from Kakao M's social media accounts. C-JeS subsequently threatened to remove mentions of Kakao M from Junsu's upcoming showcase and to file for a civil appeal to the Fair Trade Commission and Anti-Corruption and Civil Rights Commission.[29]

In response, Kakao M stated that they were still in discussions regarding the album's promotion and that nothing had been confirmed prior to the relevant article's release. They pointed to the showcase event page on MelOn's homepage still being up as evidence that promotions were going ahead as planned. C-JeS responded saying that they had begun receiving pre-orders for the album and entries for the showcase event without a response from Kakao M.[30][31]

Following media attention, the two companies met on July 8 and resolved the dispute. Incredible was promoted and distributed by Kakao M as planned.[32]

On February 19, 2019, LOOΠΔ's repackage album [X X] was released, licensed under Kakao M. Initially, they did not print enough copies of the limited edition versions of the album. Thus, the release of the physical albums was postponed several days. In addition, [X X] was taken off iTunes as an EP as soon as it began topping the charts, and the tracks in the album could only be bought individually.

A few days later, the second issue was eventually fixed and [X X] was restored on Apple Music. However, when fans contacted Kakao M to ask about the distribution of the physical albums, Kakao M stated that the production of the limited edition albums had been discontinued.[33]

Despite their statement, on February 26, Blockberry Creative, the small record label that manages LOOΠΔ, stated that the albums will be shipped to distributors on February 28.[34]

Melon Company[37] (Hangul: 멜론컴퍼니; RR: mellon keompeoni) is Kakao M's online music service company, operating Melon (short for melody on),[38][39] the most popular music service in Korea, with 59% of all users in South Korea as of November 2013[update]. That year Soompi ranked MelOn as the third most influential entity in the K-pop industry.[40]

Music Content Company[41] (Hangul: 음악컨텐츠컴퍼니; RR: eum-ak keontencheu keompeoni) is Kakao M's music content production company, which includes the music content brand 1theK (which was known as LOEN Music before February 2014), ticket selling portal Melon Ticket[42] and distributes over 300 titles per year, working with independent agencies to invest in music production. The name '1theK' indicates its aim of creating one source for worldwide K-pop content.[43]

Kakao M manages its artists within the companies under its Music Content Company, including LOEN Tree (2012) and Collabodadi (2014). Collabodadi artists were moved to LOEN Tree in September 2015 and later LOEN Tree renamed as Fave Entertainment in February 2017.

In December 2017, Kakao M established an one-person agency E&T Story Entertainment for actress Kim So-hyun, which is led by her long-time manager Park Chan-woo.[44] As January 2018, Kakao M's independent label Plan A Entertainment takes over the agency.